Utility Customers get $400 Million from Sempra Settlement

California utility customers will get $400 million in refunds from San Diego-based Sempra Energy, stemming from the 2000-2001 energy crisis. The settlement was announced today (April 28) by Attorney General Edmund G. Brown Jr. The deal provides $270 million to reimburse customers who are paying off crisis-related debt on their monthly gas and electric bills. Sempra will also pay $130 million to consumers to settle separate claims by the state Public Utilities Commission and the Department of Water Resources. During the crisis, Sempra, Enron and other companies created phony energy shortages and blackouts, leading to record high energy prices. In legal documents, Sempra was accused of "Enron-style gaming" of energy markets and a "pervasive pattern of market manipulation and abuse." Sempra was accused of entering "Enron-style partnerships" that unsettled markets, driving prices higher.

Comments

This is the second major settlement announcement about SDG&E RE long-running CPUC disputes in as many weeks (http://www.sandiegoreader.com/weblogs...), following the KUSI announcement of Michael Aguirre's intervention in CPUC wildire insurance matters involving SDG&E last week.

I don't think he had anything to do with either of the settlements directly, but his presence and concurrent taking of depositions certainly had something to do with the timing and no-so-favorable-to-shareholders terms of those two settlements.

Remember: that Enron commodity trading unit that became Sempra Energy was composed of "The Smartest Guys in the Room" according to CNBC.

Jeffrey Skilling: "Oh I can't help myself. You know what the difference between the state of California and Titanic? And this is being webcast, and I know I'm going to regret this - at least when the Titanic went down, the lights were on."

Sempra said it settled the complaint so it could "move forward and focus on our core business, which is energy." Spokesman Doug Kline stressed that the state's claims of market manipulation were never proved, and the company "did nothing wrong."

Response to post #3: He was a tiger at those depositions. That might have had an indirect effect on the settlements. Mike's interest in Sempra's depredations is bad news for this predatory company. Best, Don Bauder

Why does one pay $400 million when they "did nothing wrong"?

Since this morning, after I spoke with the Attorney General's office, I've discovered an interesting interim decision (http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/12504.pdf) by CPUC regarding SDG&E, Sempra Energy, and the obligatory interests of a holding company to provide necessary capital to its own utility before said utility whines to CPUC that the utility must raise rates... unfortunately, the 2001 OII (Order Instituting Investigation) filed as CPUC I-01-004-002 regarding SCE, PG&E, SDG&E and their holding companies, which the interim decision speaks to, appears to be not available online.

Citing that decision above, SDG&E's part in the WEBA application appears somewhat disingenuous without mentioning the "first obligation" regarding "capital" of the holding company to a utility lacking resources to cover its own operations, no matter how prone to wildfires those operations might be. MAYBE somebody who's already allowed by parties to intervene should bring it up.

I agree with Mr. Bauder's assessment of Aguirre's tenacity. I am still sorry that we could not get Aguirre involved to represent us in ENCANTO GAS HOLDER VICTIMS v. SDG&E before we lost to Sempra Energy & SDG&E's motion for summary judgment late last year, $70K-in-court-costs sorry.

The language of "not admitting to wrongdoing (or guilt) in the settlement" has been a persistent feature of virtually all such deals for a quarter-century or more. If pressed the settler would claim that it was to avoid legal costs and provide the opportunity to move ahead in one's business, or some such crap. If you don't hear the same cliched flavor as you usually read in resignation letters, "To spend more time with my family" you're not tuned in. (These jokers who want to spend more time with their families NEVER spent time at home. It was career, career, career, and ego gratification. More than two days around the house, and they'll go nuts, and so will the spouse.) So, these settlements for hundreds of millions, while they admit NO GUILT, mean that they know they were caught red-handed, and are paying up. So, why not say they were guilty? Loss of face is the reason. We usually associate loss of face with certain Asian cultures, but the American business culture values face as much or more, it that's possible, than Japan, or Korea, or China.

Take it all with a grain of salt, and look not at the words but at the deeds and the bucks. Follow the money and it will reveal the truth.

Response to post #7: At least, I don't think they can get this one back from the ratepayers. They are trying to get their insurance costs -- around a billion dollars -- from the ratepayers, when the company's negligence caused the fires. Best, Don Bauder

Response to post #8: As city attorney, Aguirre tried valiantly to keep Sempra from screwing ratepayers. That's one reason the establishment, led by the Union-Tribune, smeared him out of office. Best, Don Bauder

Response to post #10: SEC settlements have the line "without admitting or denying" participation in the scam. As to those stepping down to spend time with the family: Jeff Skilling of Enron, after less than a year as CEO, stepped down to spend more time with his famil, supposedly. I always said that the authorities should have put him on the stand and demanded that he give the names of his children. Best, Don Bauder

Obviously far too many Sempra executives graduated from the Enron Graduate School For Screwing Ratepayers.

Just as obviously from everything we learned from Don about Sempra being the root cause of the San Diego Energy Crisis, Business Ethics, Honor, integrity, and Morality were not allowed to be mentioned in any of the courses and anyone who dared to bring those subjects up were dismissed from the school.

Peevey and Felsinger took the same courses, were classless co-valedictorians in fleecing ratepayers, and both were just as responsible for the 2000 San Diego Energy Crisis that has contributed greatly to the decline and fall of San Diego.

Response to post #27: Felsinger went on to become CEO of Sempra. Peevey, after making a complete ass of himself in SCE's clumsy attempt to take over SDG&E, went on to become head of the PUC. At the top levels, there is no punishment for inept or corrupt behavior; the top execs just keep ascending the ladder, all the while claiming that free enterprise rewards those who are successful. Best, Don Bauder

Yes but, UCAN and Shames have been "chasing Sempra" and SDG&E for decades and it is Shames' personal responsibility to San Diego to have the most complete, up to date files on all criminal activities by Sempra as UCAN's obligation to protect San Diego ratepayers from Sempra's criminal activities.

All Aquirre should have to do is copy all of Shames/UCAN's, and your files for, as you put it:

'phony energy shortages and blackouts, leading to record high energy prices. In legal documents, Sempra was accused of "Enron-style gaming" of energy markets and a "pervasive pattern of market manipulation and abuse." Sempra was accused of entering "Enron-style partnerships" that unsettled markets, driving prices higher.'

It shouldn't take more than a week to press charges and make arrests if all the accusations you alone have made are true.

Response to post #35: Trouble is, there are probably no -- zero -- potential prosecutors in San Diego, although I haven't given up hope on the new U.S. attorney yet. The DA, city attorney, AG's office will do nothing to rock the establishment's boat. Right now, it appears that the establishment has a free pass. Best, Don Bauder